Cancellations have been attributed to a range of factors, including buyer financing issues, unfavorable appraisals, job losses, or rising costs, according to Lawrence Yun, NAR’s chief economist.
“Stock market fluctuations, restrained consumer confidence and broader economic and geopolitical uncertainties may be leading to higher-than-normal cancellations rates in recent months,” Yun said.
The broader housing market continues to struggle under the weight of elevated mortgage rates and rising home prices, which have limited affordability for many buyers. Sales of previously owned homes in May remained at their slowest pace since 2009.
Despite this, NAR noted that pending home sales rose 1.8% from April and were up 1.1% compared to May 2024. However, a snapshot by Redfin covering the four weeks ending June 22 showed pending sales fell 2.3% from the previous year—the sharpest drop in three months.
In light of these dynamics, economists at mortgage finance firm Fannie Mae revised their forecast for existing home sales in 2025. The group now expects a 2% increase, with 4.14 million existing homes projected to sell, down from an earlier estimate of 4.24 million. They anticipate a more robust rebound in 2026, projecting a 9.5% increase in home sales as mortgage rates ease to around 6.1%.
